Standard & Poor’s (S&P Global), an international rating agency, has revealed through its credit report that the production of oil in Uganda is set to be delayed until after the year 2020 as a result of delays in investment decisions required to kick-start construction work.
“Although the oil companies involved in the project are expected to make their final investment decisions by the end of 2017, the decision may be delayed until 2018,” S&P said in its rating.
“We understand that the oil-export pipeline will go through Tanzania and the crude oil will be exported from Tanga Port in northern Tanzania. Investments are likely to rise in the second half of 2018.
It further confirmed that oil production is not expected to start until after 2020.
According to the report, the Ugandan government has been insisting that oil will be delivered by 2020 even with the infrastructure gaps and decision-making process in the country.
The oil companies are currently carrying a Front End Engineering Design (FEED) study for the construction of the 1,440-kilometre pipeline.